Netflix Settlement Trims 4Q Earnings by 14%

It turns out Netflix's fourth-quarter earnings aren't quite as good as the video subscription service told investors a couple weeks ago.

The company lowered its net income by 14 percent to account for a $9 million payment that will be made as part of a legal settlement reached after the Jan. 25 release of Netflix's results for the final three months of last year.

Accounting for the payment lowered Netflix's fourth-quarter earnings from a previously reported $40.7 million, or 73 cents per share, to $35.2 million, or 64 cents per share. Netflix Inc. disclosed the change in a regulatory filing late Friday.

The settlement covers claims made under the Video Privacy Protection Act, a law that prohibits rental services from sharing information about what their customers have been watching.